The Triumph of the 1%

The Triumph of the 1%

The election of Donald Trump, and the daily infliction of another huckster, ideologue, paranoid, or unrepentant one-percenter cabinet appointment, has upended the politics of inequality. The defining issue of our time, not an insignificant source of Trump’s victory, is disappearing from the national political radar. So it is dismally appropriate, in the days between the appointments of Ben Carson at Housing and Urban Development and Andrew Puzder at Labor, that Thomas Piketty and colleagues have released updated and revised estimates of the share of national income going to top earners.

Making novel use of tax returns, this research first highlighted the now-iconic “suspension bridge” of top income shares—high at the tail end of the Gilded Age and through the laissez-faire 1920s, descending sharply through the shocks of the Great Depression and the Second World War (and the policies that accompanied both), and then rising again as the postwar political and economic compact was dismantled. The new paper adds to this story in three important ways. First, drawing on a wider range of income data (combining tax, survey, and national accounts), it offers a more complete picture of income distribution—capturing not just the top 10 percent but (for the last half-century) the bottom 50 percent and the middle 40 percent as well. Second, it traces those shares before and after taxes and transfers, offering a clear view of the distributional impact of government programs. And third, it teases apart household or tax unit income measures, and then uses individual incomes to suggest the ways in gender inequality has shaped these larger trends.

Here a couple of glimpses at the new data. The first graphic shows the share of national income claimed by the top 10 percent and top 1 percent of earners, with a toggle for the pre-tax and post-tax estimates.

Thanks to Piketty’s landmark 2013 book, the basic trajectory of top incomes is by now well known. But it is even starker if we express those incomes in real (inflation-adjusted) dollars. The second graphic traces average incomes—pre- and post-tax—for the top 10, 5, 1, 0.5, 0.1, and 0.01 percent of earners. Across most of this history, the impact of the tax system on those incomes is slight. I have calculated a crude effective tax rate (the difference between pre- and post-tax incomes as a percentage of pre-tax incomes) for each top income group. While rates spike for those at the very top of the income distribution during the World War II era, they fall off quickly—and since the 1970s have settled in at less than 20 percent for the top 10 percent of earners, and less than 30 percent for the top 0.01 percent.

Beginning in the 1960s, the survey and tax data is robust enough to generate an income share for the bottom 50 percent of the distribution as well. The final graphic traces the real average income of the bottom 50 percent in the lower panel, and the real average income of top income groups in the upper panel. The grey bars show the ratio between the two. The real average income of the bottom 50 percent is essentially flat, peaking at $16,632 in 1979 and stagnating thereafter ($16,197 in 2014). In 1979, the average one-percenter earned 28 times the income of the average earner from the bottom 50 percent; by 2014, this ratio had ballooned to 81 times. In 1979, the average ten-percenter earned 9 times the income of the average earner from the bottom 50 percent; by 2014, this ratio had ballooned to 19 times.

These trends are dismal, and show no sign of abating. As the economy has slowly recovered from the Great Recession, wages have scarcely budged. Income gains since 2007 have flowed almost exclusively to the richest 1 percent. While this new data brings us through those dismal years (to 2014), it is also clearly a harbinger of worse to come. By all indications, the incoming administration is not just indifferent to the root causes—growing wage inequality, financialization, the collapse of progressive taxation—but eager to double down on all of them.

Colin Gordon is a professor of history at the University of Iowa. He writes widely on the history of American public policy and is the author, most recently, of Growing Apart: A Political History of American Inequality.

In a scene from HBO’s The Deuce, streetwalker Ruby presents an officer with a property voucher to avoid arrest. Courtesy of HBO.

The Kurds

[W]hen we refer to all Kurdish fighters synonymously, we simply blur the fact that they have very different politics. . . right now, yes, the people are facing the Islamic State threat, so it’s very important to have a unified focus. But the truth is, ideologically and politically these are very, very different systems. Actually almost opposite to each other. —Dilar Dirik, “Rojava vs. the World,” February 2015

The Kurds, who share ethnic and cultural similarities with Iranians and are mostly Muslim by religion (largely Sunni but with many minorities), have long struggled for self-determination. After World War I, their lands were divided up between Iraq, Iran, Syria, and Turkey. In Iran, though there have been small separatist movements, Kurds are mostly subjected to the same repressive treatment as everyone else (though they also face Persian and Shi’ite chauvinism, and a number of Kurdish political prisoners were recently executed). The situation is worse in Iraq, Syria, and Turkey, where the Kurds are a minority people subjected to ethnically targeted violations of human rights.

Iraq: In 1986–89, Saddam Hussein conducted a genocidal campaign in which tens of thousands were murdered and thousands of Kurdish villages destroyed, including by bombing and chemical warfare. After the first Gulf War, the UN sought to establish a safe haven in parts of Kurdistan, and the United States and UK set up a no-fly zone. In 2003, the Kurdish peshmerga sided with the U.S.-led coalition against Saddam Hussein. In 2005, after a long struggle with Baghdad, the Iraqi Kurds won constitutional recognition of their autonomous region, and the Kurdistan Regional Government has since signed oil contracts with a number of Western oil companies as well as with Turkey. Iraqi Kurdistan has two main political parties, the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK), both clan-based and patriarchal.

Turkey: For much of its modern history, Turkey has pursued a policy of forced assimilation towards its minority peoples; this policy is particularly stringent in the case of the Kurds—until recently referred to as the “mountain Turks”—who make up 20 percent of the total population. The policy has included forced population transfers; a ban on use of the Kurdish language, costume, music, festivals, and names; and extreme repression of any attempt at resistance. Large revolts were suppressed in 1925, 1930, and 1938, and the repression escalated with the formation of the PKK as a national liberation party, resulting in civil war in the Kurdish region from 1984 to 1999.

Syria: Kurds make up perhaps 15 percent of the population and live mostly in the northeastern part of Syria. In 1962, after Syria was declared an Arab republic, a large number of Kurds were stripped of their citizenship and declared aliens, which made it impossible for them to get an education, jobs, or any public benefits. Their land was given to Arabs. The PYD was founded in 2003 and immediately banned; its members were jailed and murdered, and a Kurdish uprising in Qamishli was met with severe military violence by the regime. When the uprising against Bashar al Assad began as part of the Arab Spring, Kurds participated, but after 2012, when they captured Kobani from the Syrian army, they withdrew most of their energy from the war against Assad in order to set up a liberated area. For this reason, some other parts of the Syrian resistance consider them Assad’s allies. The Kurds in turn cite examples of discrimination against them within the opposition.